CarParts.com, Inc 10-Q for FY2022 Q3

CarParts.com, Inc. (PRTS)

10-Q 2022-11-10 For: 2022-10-01

Added on April 07, 2026

About this 10-Q

CarParts.com, Inc filed this 10-Q on November 10, 2022, covering the quarter ended October 1, 2022 (FY2022 Q3).

Headline figures

Quarter ended October 1, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $164.81M; up 16.2% from $141.85M a year earlier
Net loss: $948K; compared with a net loss of $4.66M a year earlier
Diluted EPS: -$0.02; compared with -$0.09 a year earlier

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	PRTS	The NASDAQ Stock Market LLC (NASDAQ Global Market)


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
	PART I. FINANCIAL INFORMATION

ITEM 1.	Financial Statements	4
	Consolidated Balance Sheets (Unaudited) at October 1, 2022 and January 1, 2022	4
	Consolidated Statements of Operations and Comprehensive Operations (Unaudited) for the Thirteen and Thirty-nine Weeks Ended October 1, 2022 and October 2, 2021	5
	Consolidated Statements of Stockholders’ Equity (Unaudited) for the Thirteen and Thirty-nine Weeks Ended October 1, 2022 and October 2, 2021	6
	Consolidated Statements of Cash Flows (Unaudited) for the Thirty-nine Weeks Ended October 1, 2022 and October 2, 2021	7
	Notes to Consolidated Financial Statements (Unaudited)	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4.	Controls and Procedures	21

	PART II. OTHER INFORMATION

ITEM 1.	Legal Proceedings	21
ITEM 1A.	Risk Factors	21
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
ITEM 3.	Defaults Upon Senior Securities	43
ITEM 4.	Mine Safety Disclosures	43
ITEM 5.	Other Information	43
ITEM 6.	Exhibits	44


	October 1,		January 1,
	2022		2022
ASSETS
Current assets:
Cash and cash equivalents	$	16,654	$	18,144
Accounts receivable, net		9,501		5,015
Inventory, net		154,751		138,851
Other current assets		6,703		6,592
Total current assets		187,609		168,602
Property and equipment, net		25,021		20,736
Right-of-use - assets - operating leases, net		25,042		28,680
Right-of-use - assets - finance leases, net		19,705		15,130
Other non-current assets		2,612		2,188
Total assets	$	259,989	$	235,336
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	68,208	$	67,372
Accrued expenses		19,997		17,517
Customer deposits		250		826
Right-of-use - obligation - operating, current		4,429		4,201
Right-of-use - obligation - finance, current		4,614		2,953
Other current liabilities		4,186		3,925
Total current liabilities		101,684		96,794
Revolving loan payable		5,000		—
Right-of-use - obligation - operating, non-current		22,402		26,367
Right-of-use - obligation - finance, non-current		15,997		12,868
Other non-current liabilities		3,323		3,739
Total liabilities		148,406		139,768
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 100,000 shares authorized; 54,558 and 52,960 shares issued and outstanding as of October 1, 2022 and January 1, 2022 (of which 2,565 are treasury stock)		57		56
Treasury stock		(7,625)		(7,625)
Additional paid-in capital		293,450		282,663
Accumulated other comprehensive gain		228		274
Accumulated deficit		(174,527)		(179,800)
Total stockholders’ equity		111,583		95,568
Total liabilities and stockholders' equity	$	259,989	$	235,336


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 1,		October 2,		October 1,		October 2,
	2022		2021		2022		2021
Net sales	$	164,807	$	141,846	$	507,080	$	444,184
Cost of sales ⁽¹⁾		108,659		94,513		327,835		294,328
Gross profit		56,148		47,333		179,245		149,856
Operating expense		56,729		51,668		173,144		154,353
(Loss) income from operations		(581)		(4,335)		6,101		(4,497)
Other income (expense):
Other, net		117		24		363		221
Interest expense		(435)		(309)		(1,073)		(826)
Total other expense, net		(318)		(285)		(710)		(605)
(Loss) income before income taxes		(899)		(4,620)		5,391		(5,102)
Income tax provision		49		39		118		207
Net (loss) income		(948)		(4,659)		5,273		(5,309)
Other comprehensive (loss) gain:
Foreign currency translation adjustments		—		60		124		90
Unrealized (loss) gain on deferred compensation trust assets		(36)		(5)		(170)		68
Total other comprehensive (loss) gain		(36)		55		(46)		158
Comprehensive (loss) income	$	(984)	$	(4,604)	$	5,227	$	(5,151)
Net (loss) income per share:
Basic net (loss) income per share	$	(0.02)	$	(0.09)	$	0.10	$	(0.10)
Diluted net (loss) income per share	$	(0.02)	$	(0.09)	$	0.09	$	(0.10)
Weighted-average common shares outstanding:
Shares used in computation of basic net (loss) income per share		54,481		52,264		54,009		50,903
Shares used in computation of diluted net (loss) income per share		54,481		52,264		57,283		50,903


								Accumulated
				Additional				Other				Total
	Common Stock			Paid-in-		Treasury		Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Capital		Stock		(Loss) Income		Deficit		Equity
Balance, January 2, 2021	48,091	$	51	$	260,260	$	(7,146)	$	(215)	$	(169,461)	$	83,489
Net loss	—		—		—		—		—		(2,722)		(2,722)
Issuance of shares in connection with stock option exercise	130		—		163		—		—		—		163
Issuance of shares in connection with restricted stock units vesting	2,382		2		(6)		—		—		—		(4)
Issuance of shares in connection with BOD fees	—		—		6		—		—		—		6
Share-based compensation	—		—		4,080		—		—		—		4,080
Unrealized gain on deferred compensation trust assets	—		—		—		—		35		—		35
Effect of changes in foreign currencies	—		—		—		—		14		—		14
Balance, April 3, 2021	50,603		53		264,503		(7,146)		(166)		(172,183)		85,061
Net income	—		—		—		—		—		2,072		2,072
Issuance of shares in connection with stock option exercise	1,463		2		2,615		—		—		—		2,617
Issuance of stock awards	118		—		389		—		—		—		389
Issuance of shares in connection with BOD fees	—		—		6		—		—		—		6
Share-based compensation	—		—		3,821		—		—		—		3,821
Unrealized gain on deferred compensation trust assets	—		—		—		—		38		—		38
Effect of changes in foreign currencies	—		—		—		—		16		—		16
Balance, July 3, 2021	52,184	$	55	$	271,334	$	(7,146)	$	(112)	$	(170,111)	$	94,020
Net loss	—		—		—		—		—		(4,659)		(4,659)
Issuance of shares in connection with stock option exercise	108		—		451		—		—		—		451
Issuance of shares in connection with restricted stock units vesting	109		—		—		—		—		—		—
Issuance of stock awards	14		—		233		—		—		—		233
Issuance of shares in connection with BOD fees	—		—		6		—		—		—		6
Share-based compensation	—		—		4,364		—		—		—		4,364
Unrealized loss on deferred compensation trust assets	—		—		—		—		(5)		—		(5)
Effect of changes in foreign currencies	—		—		—		—		60		—		60
Balance, October 2, 2021	52,415	$	55	$	276,388	$	(7,146)	$	(57)	$	(174,770)	$	94,470

Balance, January 1, 2022	52,960		56		282,663		(7,625)		274		(179,800)		95,568
Net income	—		—		—		—		—		2,103		2,103
Issuance of shares in connection with stock option exercise	533		—		792		—		—		—		792
Issuance of shares in connection with restricted stock units vesting	519		1		(1)		—		—		—		—
Issuance of stock awards to consultants	10		—		81		—		—		—		81
Issuance of shares in connection with BOD fees	—		—		6		—		—		—		6
Issuance of shares in connection with ESPP	45		—		431		—		—		—		431
Officers and directors stock purchase plan	3		—		23		—		—		—		23
Share-based compensation	—		—		4,225		—		—		—		4,225
Unrealized loss on deferred compensation trust assets	—		—		—		—		(34)		—		(34)
Effect of changes in foreign currencies	—		—		—		—		20		—		20
Balance, April 2, 2022	54,070	$	57	$	288,220	$	(7,625)	$	260	$	(177,697)	$	103,215
Net income	—		—		—		—		—		4,118		4,118
Issuance of shares in connection with stock option exercise	70		—		136		—		—		—		136
Issuance of shares in connection with restricted stock units vesting	220		—		—		—		—		—		—
Issuance of shares in connection with BOD fees	—		—		6		—		—		—		6
Officers and directors stock purchase plan	—		—		4		—		—		—		4
Share-based compensation	—		—		771		—		—		—		771
Unrealized loss on deferred compensation trust assets	—		—		—		—		(100)		—		(100)
Effect of changes in foreign currencies	—		—		—		—		104		—		104
Balance, July 2, 2022	54,360	$	57	$	289,137	$	(7,625)	$	264	$	(173,579)	$	108,254
Net loss	—		—		—		—		—		(948)		(948)
Issuance of shares in connection with stock option exercise	63		—		184		—		—		—		184
Issuance of shares in connection with restricted stock units vesting	72		—		—		—		—		—		—
Issuance of shares in connection with BOD fees	1		—		6		—		—		—		6
Issuance of shares in connection with ESPP	62		—		363		—		—		—		363
Share-based compensation	—		—		3,760		—		—		—		3,760
Unrealized loss on deferred compensation trust assets	—		—		—		—		(36)		—		(36)
Balance, October 1, 2022	54,558	$	57	$	293,450	$	(7,625)	$	228	$	(174,527)	$	111,583



		Weighted			Weighted Average
		Average			Grant Date	Aggregate
	Shares	Exercise Price			Fair Value	Intrinsic Value
Vested and expected to vest as of January 1, 2022	3,023	$	—
Awarded	2,209	$	—
Vested	(808)	$	—
Forfeited	(1,255)	$	—
Awards outstanding, October 1, 2022	3,169	$	—	$	10.66	$	16,382
Vested and expected to vest as of October 1, 2022	3,169	$	—	$	10.66	$	16,382


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Net (loss) income per share:
Numerator:
Net (loss) income allocable to common shares	$	(948)	$	(4,659)		5,273		(5,309)
Denominator:
Weighted-average common shares outstanding (basic)		54,481		52,264		54,009		50,903
Common equivalent shares from common stock options and restricted stock		—		—		3,274		—
Weighted-average common shares outstanding (diluted)		54,481		52,264		57,283		50,903
Basic net (loss) income per share	$	(0.02)	$	(0.09)	$	0.10	$	(0.10)
Diluted net (loss) income per share	$	(0.02)	$	(0.09)	$	0.09	$	(0.10)


Exhibit No.	Description
31.1		Certification of the Principal Executive Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2		Certification of the Principal Financial Officer required by Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1		Certification of the Chief Executive Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Chief Financial Officer required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


Date:	November 9, 2022	CARPARTS.COM, INC.

		By:	/s/ David Meniane
			David Meniane
			Chief Executive Officer
			(Principal Executive Officer)

		By:	/s/ Ryan Lockwood
			Ryan Lockwood
			Chief Financial Officer
			(Principal Financial Officer)

Ev Peker
	/s/ David Meniane
	David Meniane
	Chief Executive Officer
	(Principal Executive Officer)

Id meniane
	/s/ Ryan Lockwood
	Ryan Lockwood
	Chief Financial Officer
	(Principal Financial Officer)

Avid Meni
	/s/ Ryan Lockwood
	Ryan Lockwood
	Chief Financial Officer


	Thirty-Nine Weeks Ended
	October 1,		October 2,
	2022		2021
Operating activities
Net income (loss)	$	5,273	$	(5,309)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense		9,671		7,123
Amortization of intangible assets		81		83
Share-based compensation expense		7,786		11,277
Stock awards issued for non-employee director service		17		17
Stock awards related to officers and directors stock purchase plan from payroll deferral		27		—
(Gain) loss from disposition of assets		(41)		15
Amortization of deferred financing costs		37		13
Changes in operating assets and liabilities:
Accounts receivable		(4,624)		(1,737)
Inventory		(15,900)		(42,453)
Other current assets		(124)		1,580
Other non-current assets		(745)		556
Accounts payable and accrued expenses		4,524		19,477
Other current liabilities		(315)		266
Right-of-use obligation - operating leases - current		279		960
Right-of-use obligation - operating leases - long-term		(108)		(331)
Other non-current liabilities		(136)		114
Net cash provided by (used in) operating activities		5,702		(8,349)
Investing activities
Additions to property and equipment		(10,546)		(8,434)
Proceeds from sale of property and equipment		44		27
Net cash used in investing activities		(10,502)		(8,407)
Financing activities
Borrowings from revolving loan payable		10,351		105
Payments made on revolving loan payable		(5,351)		(105)
Payments on finance leases		(3,099)		(1,566)
Net proceeds from issuance of common stock for ESPP		794		—
Statutory tax withholding payment for share-based compensation		—		(3)
Proceeds from exercise of stock options		1,113		3,230
Net cash provided by financing activities		3,808		1,661
Effect of exchange rate changes on cash		(498)		(27)
Net change in cash and cash equivalents		(1,490)		(15,122)
Cash and cash equivalents, beginning of period		18,144		35,802


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
House Brands
Replacement Parts	68	%	67	%	67	%	68	%
Hard Parts	18	%	18	%	20	%	18	%
Performance	1	%	—	%	1	%	—	%

Branded
Replacement Parts	1	%	1	%	1	%	1	%
Hard Parts	7	%	8	%	7	%	8	%
Performance	5	%	6	%	4	%	5	%

Total	100	%	100	%	100	%	100	%